L1 Long Short Fund Ltd. · ASX:LSF
L1 Long Short Fund — Investor Presentation (March 2019)
20 slides from L1 Long Short Fund's investor presentation, Mar 26, 2019
Slide 1: L1 Long Short Fund Limited March 2019
For personal use only L1 Long Short Fund Limited March 2019
Slide 2: Performance Track Record
Performance Track Record For personal use only ZENITH AWARD Launched L1 Capital Long Short Fund (unlisted fund since inception) Sep 2014 132.0% net return since inception; 20.6% net return p.a. since inception Best ‘Australian Equities – Alternative Strategies’ 68 individual positions added +1%
Slide 3: Reporting Season Observations
Reporting Season Observations Key points: For personal use only Profit results and outlooks were weaker than consensus expectations. Largest negative EPS revisions since the GFC. Sharp market rally was not a function of strong earnings. Most of the move in February was from a relief rally in ban
Slide 4: Reporting Season Observations
Reporting Season Observations For personal use only Only ~40% of ASX200 firms grew EPS in 1H19, the weakest period since 2009 EPS growth for the ASX200 was cut by 3.4%, the largest downgrade to full-year growth forecasts since the GFC. Revision to full- year consensus EPS growth post 1H results anno
Slide 5: Fund Performance (2019)
Fund Performance (2019) For personal use only The Fund has had a strong start to 2019 (up 9.7% for Jan-Feb 2019). The Fund’s strong performance in both January (+4.3%) and February (+5.1%) was driven by stock picking during reporting season and a recovery in some stocks that were oversold in Dec
Slide 6: Portfolio Positioning
Portfolio Positioning For personal use only Markets remain fully valued, with numerous macro risks. – U.S./China Trade War, Australian housing market stress, U.S. economic slowdown & rising wages, Brexit, fragile European banking system, China structural imbalances. M&A activity likely to pick u
Slide 7: Portfolio Positioning
Portfolio Positioning For personal use only Net Exposure Gross Exposure Australia/New Zealand 21% 158% North America 13% 32% Europe 13% 13% Asia 8% 13% Total 55% 216% All data current as at 21 March, 2019. AFSL 314 302 L1 Long Short Fund Limited 7
Slide 8: Market Outlook
Market Outlook For personal use only 1 yr forward P/E for the ASX200 Industrials is 20.9x versus 10 year average of 16.7x Source: CLSA, Datastream AFSL 314 302 L1 Long Short Fund Limited 8
Slide 9: Market Outlook
Market Outlook For personal use only Australian equities look fully priced – industrials are trading at a forward P/E of 20.9x versus long run average of 16.7x. However, compared to other asset classes (eg. bonds, cash, property) equities still look relatively attractive. After a 10 year bull
Slide 10: M&A activity likely to pick up in 2019
M&A activity likely to pick up in 2019 For personal use only After a relatively quiet period in terms of M&A activity, we believe activity is about to surge. Private equity firms in Australia and Asia have recently raised tens of billions of dollars. Debt markets are very conducive to deals –
Slide 11: New Position – WorleyParsons (WOR)
New Position – WorleyParsons (WOR) WorleyParsons is one of the world’s leading oil services companies. It recently acquired the Energy, For personal use only Chemicals & Resources division of U.S. peer Jacobs. The shares had fallen from around $19 to $11 between October and December last year du
Slide 12: New Position – Vivendi (VIV)
New Position – Vivendi (VIV) French music and media conglomerate whose main asset is the world’s number 1 music label, For personal use only Universal (UMG). UMG has a 30% market share of global recorded music, which gives it enormous market power. Revenue & earnings are accelerating on the ba
Slide 13: Key Portfolio Position – Chorus (CNU)
Key Portfolio Position – Chorus (CNU) Chorus has been one of the largest positions in the Fund since inception in Sept 2014 ($1.60/share v today at For personal use only $5.50) Chorus is the monopoly owner of the new fibre network across most of New Zealand (81%) and also owns 100% of the monopoly
Slide 14: Key Portfolio Position – CK Hutchison (1.HK)
Key Portfolio Position – CK Hutchison (1.HK) Extremely high quality asset base - US$40b+ of infrastructure assets, 51 major ports, largest and For personal use only fastest growing pharmacy chain in China, large European telco business, global energy assets. Key assets have very attractive indus
Slide 15: Key Portfolio Position – Boral (BLD)
Key Portfolio Position – Boral (BLD) Boral owns some of the most strategic quarry, cement, concrete and asphalt assets on the east coast of Australia, For personal use only which are set to benefit from the multi-year expansion of infrastructure spending in Australia (primarily large scale road pr
Slide 16: Key Portfolio Position – HeidelbergCement (HEI)
Key Portfolio Position – HeidelbergCement (HEI) HeidelbergCement is a high quality, global construction materials business listed in Germany and For personal use only operating in 55 different countries globally. HEI shares performed poorly in 2018 given general weakness in the German stock mark
Slide 17: Key Portfolio Position – News Corp (NWS)
Key Portfolio Position – News Corp (NWS) NWS owns a broad suite of digital real estate and media assets, including a 62% stake in REA (Australia’s No.1 For personal use only digital real estate portal), along with an 80% stake in realtor.com (2nd largest U.S. real estate portal) The shares are d
Slide 18: Contact
Contact For personal use only Investor Relations Wayne Murray Phone + 61 3 9286 7008 Email [email protected] AFSL 314 302 L1 Long Short Fund Limited 18
Slide 19: Legal Disclaimer
Legal Disclaimer For personal use only Information contained in this presentation The opinions, advice, recommendations and other information contained in this publication, whether express or implied, are published or made by L1 Capital Pty Ltd (ABN 21 125 378 145), Australian Financial Services Lic
Slide 20: ABN | AFSL
For personal use only ABN 21 125 378 145 | AFSL 314 302 Level 28, 101 Collins Street Melbourne Victoria 3000 Australia Phone +61 3 9286 7000 Fax +61 3 9286 7099 Web L1.com.au
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